Enhancing the enhanced scenario-based method of cost risk analysis

• Main Author: Hooper, Seth T.
• Other Authors: Nussbaum, Daniel
• Published: Monterey, California. Naval Postgraduate School 2012
• Online Access: http://hdl.handle.net/10945/10622

The current S-Curve method of cost risk analysis for major DON acquisitions projects does not accurately estimate actual cost when the program reaches Full Rate Production. Another, sometimes more effective method of measuring cost risk, is by using the enhanced scenario-based method (eSBM) of risk analysis. The reason that cost estimations from the milestone B costs are inaccurate is that very little, if any, real information about the project is known. eSBM allows managers a less statistically tasking method of determining cost risk for a project while still maintaining the requirements of the Weapons System Acquisitions Reform Act. The key factors in measuring the usefulness of eSBM should be focused on the acquisition strategy being used for the project and the time frame from Milestone B to later Milestones. I presume that different acquisition strategies will yield different levels of success in estimating cost risk for eSBM.